While Many Companies Try SaaS for Cost Savings, Top Performers Discover Competitive Advantage, According to IBM Study

Study reveals that SaaS leaders collaborate better with social tools and make better decisions through analytics

ARMONK, NY and ORLANDO, FL – January 28, 2014: Today at IBM Connect 2014, IBM (NYSE:IBM) announced that nearly half of the businesses using Software-as-a-Service (SaaS) are achieving competitive advantage, rather than simply reducing costs. Leading enterprises—those gaining competitive advantage through broad SaaS adoption—are collaborating more effectively through social business tools, improving the customer experience, and accelerating time to market through their SaaS initiatives, according to a recent survey conducted with more than 800 IT and business decision makers worldwide by the IBM Center for Applied Insights. [1]

Global spending on SaaS is expected to reach $45.6B by 2017, according to industry estimates. SaaS is often used by line-of-business leaders who are looking to deploy technology to rapidly provide their teams with needed functionality, increase productivity and address new market opportunities. In fact, industry analysts estimate that by 2017, CMOs will spend more on IT than CIOs, while Forrester reports that 65 percent of business leaders have plans to buy technology for their group without involving IT at all.

However, circumventing IT to deploy SaaS without provisioning and securing it first can have unintended consequences, and IBM’s study suggests that organizations in which IT and business leaders work together to select, secure and deploy SaaS applications are in fact the ones who deliver the greatest value to their organization. Further, organizations that are gaining the most out of their SaaS deployments are more likely to see it as a critical piece of their enterprise cloud strategy when compared to their peers.

Princess Cruise Lines originally turned to SaaS to save money and benefit from increased efficiencies while gaining instant access to technology resources. Over time, however, the company realized that the IBM Connections social software platform, delivered as a service through the cloud, fostered a more team-oriented environment resulting in more innovative thinking. Princess uses this as a competitive differentiator in the market to tout its superior customer service, the net effect of a socially advanced workforce.

Nearly one in five companies that responded to IBM’s survey has deployed SaaS broadly and is now gaining competitive advantage as a result. By developing mature and cohesive enterprise-wide SaaS strategies, these Pacesetter organizations are able to improve market agility, achieve a deeper level of collaboration and make better decisions than their peers. Specifically, compared to peers that are newer or less advanced with their SaaS adoption, Pacesetters are:

79 percent more likely to have increased collaboration across their organization and ecosystem through SaaS

More than twice as likely to have leveraged analytics across the organization to turn big data into insights using SaaS

More than twice as likely to have increased innovation using SaaS

The study confirms that SaaS is delivering on a wide array of benefits, on top of lowering total cost of ownership, and shows that organizations that strategically and collaboratively deploy SaaS are able to execute on programs that drive business growth better than their peers who lag with SaaS deployments.

“It’s common knowledge that deploying SaaS broadly has economic advantages, but the truly innovative companies have recognized that SaaS delivers real competitive advantage to fuel top-line growth, as well,” said Craig Hayman, IBM General Manager, Industry Solutions and executive sponsor of the study. “Whether they are using it to enter new markets, transform or create entirely new business models, or improve relationships with their customers and suppliers, pacesetting organizations are embracing SaaS in a meaningful way.”

IBM Delivers Broad Set of SaaS Solutions

To help organizations accelerate innovation around customer experience and meet their business objectives in concert with their company's IT strategy, IBM unveiled the industry’s first cloud-suites for the entire c-suite in June 2013. The offerings – which provide specific solutions for key leaders and their departments across the enterprise from marketing to sales to finance to HR to procurement and more – can be used to help customers drive competitive advantages with SaaS.

IBM is building on its industry leading portfolio of SaaS products with a series of new SaaS applications that it announced today at Connect.

For more information or to download the full report visitibm.com/ibmcai/saas

About the study

To gain a better understanding about how leaders are unlocking competitive advantage through SaaS, the IBM Center for Applied Insights conducted a survey of 879 IT and line-of-business decision makers in six countries globally, including Brazil, China, India, South Africa, the UK and U.S. Twenty-two percent of respondents are C-level executives (10 percent C-level IT and 12 percent in other C-suite roles). They work in enterprises of varying sizes – 20 percent with 10,000 or more employees and, at the other end of the spectrum, 40 percent with less than 2,500 employees.

About the IBM Center for Applied Insights

The IBM Center for Applied Insights introduces new ways of thinking, working and leading. Through evidence-based research, the Center arms leaders with pragmatic guidance and the case for change.

About IBM Cloud Computing

IBM is the global leader in cloud with an unmatched portfolio of open cloud solutions that help clients build, rent or tap into cloud capabilities. IBM cloud supports 30 percent more top-level websites than any other cloud computing provider. Among the Fortune 500, 24 of the top 25 companies rely on IBM cloud computing. Through the first three quarters of 2013, IBM’s quarterly revenue for cloud computing grew by 70 percent, reaching $1 billion (US) in the third quarter alone. No other company has the ability to bring together unique industry knowledge and unmatched cloud capabilities, that have already helped more than 20,000 clients around the world. Today, IBM has more than 100 cloud SaaS solutions, 37,000 experts with deep industry knowledge helping clients transform and a network of more than 25 global cloud delivery centers.

Since 2007, IBM has invested more than $6 billion in acquisitions to accelerate its cloud initiatives. For more information about cloud offerings from IBM, visit http://www.ibm.com/smartcloud. Follow us on Twitter at @IBMcloud and on our blog at http://www.thoughtsoncloud.com. Join the conversation with #ibmcloud.

Footnotes:

[1] The growth markets studied include Brazil, China, India and South Africa. Mature market countries studied include the United Kingdom and the United States. To smooth possible geographic distortions, responses were weighted based on IBM assessment of each country’s total IT spend

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IBM Builds On Growing Client and Partner Momentum for Social Business in the Cloud

ARMONK, N.Y., January 28, 2014 – IBM (NYSE: IBM) today announced strong momentum for its Software-as-a-Service (SaaS) based social business offerings from partners, clients and developers. As part of today's news, IBM is also highlighting its continued investment with new innovations in its social business and cloud technologies.

According to a recent IBM study of more than 800 business decision makers worldwide, organizations that use software delivered as a service through the cloud (SaaS) reported two and a half times higher profit than their peers. In addition, organizations that adopt cloud-based solutions are 79 percent more likely to drive increased collaboration across their organization, and twice as likely to leverage analytics to unlock greater insight about their business.

A growing list of businesses such as Codorniu, Princess Cruise Lines, SIKA, SafeGuard, Shanks and Verisure have taken their business into the cloud, extending the benefits to millions of users around the globe.

“We’ve seen amazing demand over the past year as clients adopt and partners extend the capabilities we’ve been delivering through the cloud,” said Jeff Schick, Vice President of Social Software, IBM. “Over this period, we have spurred new innovation by integrating social capabilities into an organization’s business processes. This has been made possible through our open and extensible APIs that have let us unleash the power of cloud and help organizations collaborate and increase workforce productivity.”

Connections in the Cloud and Next Generation Web Mail Experience

IBM today announced the rebranding of its mail, chat, meetings, office productivity and content capabilities, making them part of IBM’s Connections brand in 2014. As part of this effort, IBM plans to expand the Connections portfolio to include high-fidelity, high definition video based on its Sametime 9 technology.

In addition, IBM is also announcing its next generation web mail experience. In the age of information overload, workers must be able to quickly access and effectively manage the information most vital to their job, much of which resides in their inbox. This new mail offering, planned for availability in both the cloud and on-premises, will use analytics to deliver powerful task-level focus and inbox management capabilities that let employees easily track the content and messages needed to do their job.

"IBM’s new web mail experience is very intuitive and integrated with key social business capabilities. This will help our people be more efficient in prioritizing and managing daily work, including tracking requests and follow-ups in a powerful yet simple experience," said Berry van der Schans, Information and Communication Technology Manager for Shanks Group Plc.

IBM also plans to introduce Domino Applications in the cloud through a ready-made Platform as a Service offering built on IBM SoftLayer. As a result, customers will be able to build on the investments they have made in custom applications and enhance them with new mobile options. Partners will also have a faster path for bringing their new Domino applications to cloud and getting them to market more quickly.

Growing Ecosystem Drives Demand for a New Social Business Software

IBM is teaming with business partner Parallels to integrate with their innovative cloud automation platform, making it easier for partners that distribute IBM products to assemble and sell unique cloud offerings. For example, a telecommunications company can use IBM’s new plug-in to easily combine and provision its cloud offerings from IBM and other Parallels-ready vendors, such as Sugar CRM. This streamlines the business process of delivering cloud services through a reseller channel.

IBM is also introducing a new certified set of global partners that provide on-boarding services that make it easier than ever for clients to deploy their mail to the cloud.

Furthermore, IBM’s independent software provider (ISV) partner ecosystem continues to grow. To date, hundreds of unique Connections-based applications have been developed using APIs from the IBM Social Business Toolkit. For example ISVs, such as AppFusions, Flow, HootSuite and Kaltura and Shoutlet have built entirely new applications on the IBM Connections platform -- both in the cloud and on premises.

HootSuite, for example, created a new social application integrating IBM Connections capabilities and content into the HootSuite dashboard. This allows data from corporate social networks to be viewed alongside social media data from Facebook, Twitter, LinkedIn, and other networks so employees can be even more empowered, connected, and informed.

The Social Software Leader

In 2013 IBM was named the number one provider of enterprise social software for the fourth consecutive year by IDC1.. In addition Forrester Research recognized IBM as a leader in file sync and share platforms according to the July 2013 report, The Forrester Wave™: File Sync And Share Platforms, Q3 2013*. Today 75 percent of the Fortune 100 have IBM enterprise social software